NAVEX Global's Benchmarking Your Hotline in 2016: What is your Data Telling You?

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Benchmarking Your Hotline in 2016:
What is Your Data Telling You?
March 16, 2016

P R E S E N T E D B Y
Operations Manager, Advisory Services
NAVEX Global
Carrie Penman
Chief Compliance Officer & Senior Vice
President, Advisory Services
NAVEX Global
Edwin O’Mara

Agenda
• Introductions
• Our Benchmarking Methodology
• Business Imperatives
of Benchmarking
• Key Findings
• Key Takeaways & Best Practice
Recommendations
• Q&A
• Additional Resources

Our Ethics & Compliance Ecosystem

Benchmarking Methodology & Business Imperatives

Hotline Benchmark Statistical Snapshot
• Our database starts with 12,500+ NAVEX Global clients
• Of those 4,900+ received a report in 2015 through NAVEX Global’s Hotline and
EthicsPoint Incident Management solutions
• 2,300+ clients received 10 or more reports in 2015 (representing 34 million employees)
• These 2,300+ clients received approximately 867,000 reports in 2015
• Data reflects all reports documented in clients’ EthicsPoint Incident Management
system regardless of reporting channel (web, hotline, walk-in, mobile, email, mail, etc. )
• Data covers 26 industries, and an additional 45 sub-industries
• We use medians (or midpoints) rather than averages to reduce the impact of outliers
 Normal ranges identify extreme data points as potential areas of concern
 Medians and ranges provide context for benchmarks

Key Findings

K E Y F I N D I N G # 1
Report Volume per 100 Employees

Significant Increase in Median Report Volume Rate
Source: NAVEX Global's 2016 Ethics and Compliance Hotline Benchmark Report

Survey Question:
What do you think is the biggest driver of report
volume increases?
 E&C initiatives and training helping employees know when
and what to report
 Senior leaders encouraging a “speak-up” culture
 Providing additional methods for employees to use to report
 Departments outside of (HR, audit, security)
documenting reports
 Documenting reports received from all sources (not just
hotline and web―including email, walk-ins, etc.)
 A true increase in E&C issues we need to address
 Other (please use the chat window to share specifics)

Documenting More Reports Creates Significantly
Greater Ability to Spot Trends, See Risks

Survey Question:
What is your organization’s approach to documenting
E&C reports?
 Advanced: Document reports from all reporting channels
(hotline, web, mail, email, in-person, etc.), in a centralized
incident management system. Leverage advanced analytics.
 Basic: Document reports from hotline and web forms
only in an incident management system. Leverage
basic analytics.
 Maturing: No incident management system in place yet;
still using manual approaches and spreadsheets.
 Not a Priority: We do not have an incident management
system in place, and do not feel we need one.

Organizations that documented reports from all channels in their incident
management systems captured 72% more reports.
Don’t Miss Critical E&C Data Capture
INTAKE METHODS
Incident Management System
Centralized Report Documentation,
Workflow & Analytics
MEDIAN NUMBER
OF REPORTS
CAPTURED = 1.9
Nearly 2x Visibility
Into Organizational
Culture and Trends
INTAKE METHODS
MEDIAN NUMBER
OF REPORTS
CAPTURED = 1.1

Health Care Leads in Reporting Volume
1) Health Care
2) Not for Profit
3) Retail
4) Real Estate
5) Energy & Utilities
6) Business Support Services
7) Automotive Transportation
8) Arts & Entertainment
9) Finance & Insurance
10) Pharmaceuticals
11) Aerospace & Defense
12) Food Services
13) Mining
14) Professional, Scientific & Technical Services
15) Agriculture, Forestry, Fishing & Hunting
16) Construction
17) Government
18) Security
19) Consumer Manufacturing
20) Commercial Transportation
21) Education
22) Wholesale Trade
23) Industrial Manufacturing
24) Computer Services, Hardware & Software
25) Media
26) Electronics

Report Allegation Categories

Categories of Reports Used

Allegation
Categories
2011
Median
2012
Median
2013
Median
2014
Median
2015
Median
Accounting, Auditing and
Financial Reporting
3% 3% 3% 2% 2%
Business Integrity 16% 17% 18% 17% 15%
HR, Diversity and
Workplace Respect
68% 69% 73% 69% 71%
Environment, Health
and Safety
9% 7% 7% 6% 5%
Misuse, Misappropriation
of Corporate Assets
7% 6% 6% 6% 7%
Categories of Reports Remain Relatively Consistent

Industries with the Highest Median Reporting Rate by
Allegation Category
Allegation Categories 2015 Median
Accounting, Auditing and Financial Reporting 2%
Business Integrity 15%
HR, Diversity and Workplace Respect 71%
Environment, Health and Safety 5%
Misuse, Misappropriation of Corporate Assets 7%

Anonymous vs. Named Reporters

Survey Question:
Is there a bias against anonymous reporting in
your organization?
 Yes. Senior leaders are reticent to accept and/or encourage
anonymous reports for a variety of reasons (anonymous
reporters not seen as credible; fear inability to resolve
cases, etc.).
 Somewhat. Named reporters are preferred, and may be
generally seen as more credible.
 No. The ability to report anonymously is seen as critical for
maintaining a healthy organizational culture.
 Not Sure. This issue hasn’t come up for us.

Anonymous Reporting Rate Drops Below 60%
For the First Time Since 2008

Anonymous Substantiation Rate Holds Steady

No Improvement in Anonymous Reporter
Follow-Up Rate: More Education Needed

1) Education
2) Mining
3) Security
5) Media
7) Not for Profit
8) Real Estate
9) Wholesale Trade
11) Electronics
12) Construction
15) Government
16) Retail
17) Health Care
24) Food Services
26) Pharmaceuticals
Education Leads Anonymous Reporting by Industry
Lowest Rate
Highest Rate
Overall Median Rate:
59%

Substantiated Reports

Substantiation Rate Hits All-Time High

Business Integrity Substantiation Rate Down by 8%
Overall Median Substantiation Rate in 2014 = 40%
Overall Median Substantiate Rate in 2015 = 41%

1) Not for Profit
2) Real Estate
4) Media
5) Health Care
6) Government
7) Retail
9) Pharmaceuticals
10) Education
16) Security
17) Construction
18) Electronics
22) Food Services
23) Mining
24) Wholesale Trade
Not for Profit Leads in Substantiation Rate
Lowest Rate
Highest Rate
41%

Case Closure Time

Another Significant Case Closure Time Increase

Survey Question
What do you think is the biggest factor in increasing
case closure times?
 Resource Constraints: Resources not keeping pace with
volume; “less serious” cases get stalled.
 Case Complexity: Cases are taking more time to resolve.
 Inefficiencies: Processes and tools used to assign and
execute investigations are not as streamlined as they
should be, resulting in lag time.
 Ownership Confusion: Not clear who owns resolution
for cases.
 Other: Please chat your reasons.

Case Closure Time Increases in Three of the Five
Allegation Categories
Median Case Closure Days in 2014 = 39 days
Median Case Closure Days in 2014 = 46 days

Survey Question:
Do you follow up and have input on the outcomes of
reported issues referred to HR or other departments
for investigation?
 Yes, informally.
 Yes—and we don’t close a case in the system until
we have reviewed and concurred with the findings
and any actions taken.
 No, once we make a referral, we close the case in
our system.

1) Mining
2) Government
3) Education
6) Not for Profit
7) Real Estate
9) Pharmaceuticals
10) Media
11) Electronics
15) Construction
19) Security
22) Food Services
23) Health Care
24) Wholesale Trade
26) Retail
Mining, Government, Education Have Highest Case
Closure Times
Lowest Rate
Highest Rate
46 Days

Report Intake Methods

Web Reporting Continues to Trend Up

Reports of Retaliation

Survey Question:
Where does retaliation prevention fall on your list of
E&C program priorities for 2016?
 Top Priority: We are actively looking for new tools,
resources, training and investigation approaches to
move the needle on this issue.
 Important, But Not in Top Three Priorities: Other
issues are more pressing than retaliation for us
this year.
 Not a Focus Area for Us: Not a focus for our
organization this year; measures we’ve already
put in place are effective.

Organizations Still Not Getting the Chance to Address
Retaliation Allegations Internally

Retaliation Substantiation Rates Remain Elevated

Moving Beyond the Basics: Advanced
Incident Management & Benchmarking
K E Y F I N D I N G # 1 0

• Nearly Double Risk Visibility: Documenting reports from all intake channels (not
just web & hotline) in an incident management system creates nearly twice as
much visibility into potential E&C risks
• Work Smarter: Customized workflows standardize and simplify report
management tasks, helping you capture, assign and resolve cases more effectively,
efficiently and consistently
• See Trends: Advanced analytics gives you the ability to see program gaps, measure
program effectiveness, proactively spot trends and identify and
address issues
• Make it Easier to Document Issues: Custom web forms allow you to more
efficiently capture and route reports—and make it easier for employees and
managers to document issues
• Better Protect Your Organization: More documentation also provides a stronger
legal defense in the event of a lawsuit or regulatory action
Incident Management Systems Create Exponential
Visibility & Program Effectiveness

Industry-Specific Benchmarking Provides More & Better
Insight Into E&C Health
• As our industry ranking slides showed, using accurate industry-specific
benchmarking is critical, as there can be striking differences in
benchmarks across industries.
• Industry-specific benchmarking can help you, your board and your
senior leadership understand critical issues such as:
 Are our metrics consistent with or out of line with peers?
 What E&C trends are prevalent or unique in our industry—and which ones
should we focus on?
 Are there opportunities to achieve a competitive advantage by adding focus
or resources to an aspect of our E&C program that may be an issue for
competitors?

Integrity Diagnostics: Turning Metrics Into Action
Source: Advisory Services: Integrity Diagnostics Sample Report

I’d Like To Speak With a NAVEX Global Solutions Expert About…
 Implementing a uniform and consistent process for tracking and
responding to incident reports
 Consolidating reports from multiple channels and sources
(hotline, open-door, mobile, web-based, email)
 Scheduling a demo of EthicsPoint Incident Management
Software
 Assessing whether my current hotline/incident management
solution is effective and utilized to its full potential
 Getting expert advice on improving my compliance program
(code of conduct review; program, risk or culture assessment,
board training, etc.)
 Other compliance program challenges (optimizing training,
managing policies, third party due diligence, or other)

Key Takeaways &
Best Practice Recommendations

1) Increase focus on anti-retaliation efforts
2) Work on getting case closure times back within best practice ranges
3) Get a more complete picture of your risks by documenting all reports
in one centralized incident management system
4) Make the business case for matching your report volume with
appropriate resources
5) Encourage employees to see your hotline as a resource for
information, not just a channel for reporting
5 Key Takeaways

Additional Resources
NAVEX Global offers many valuable resources for helping you increase program effectiveness by
leveraging your hotline and incident management data. Visit our website www.navexglobal.com to
find these resources and more:
White Papers:
• Whistleblower Hotlines and Case Management Solutions—Major Challenges and Best Practice Recommendations
• Key Elements for Effective Compliance Program Board Reporting
• Maximizing the Benefits of Hotline Data: Analysis and Benchmarking
On-Demand Webinars:
• Whistleblowing & Retaliation: Legal Developments And Practical Advice
• How Do I Prove My E&C Program is Effective? The Art & Science of Effectiveness Measurement
Learn More About Our Solutions:
• Hotline Solutions
• EthicsPoint Incident Management
• Integrity Diagnostics™ Custom Benchmarking
• Strategic Consulting: The Advisory Services Team

Please Submit Your Questions
If we are unable to
answer your questions
now, we will be sure to
follow up with you!

Thank You for Your Participation
Carrie Penman
Chief Compliance Officer & Senior Vice President, Advisory Services
cpenman@navexglobal.com
Edwin O’Mara
Operations Manager, Advisory Services
eomara@navexglobal.com

NAVEX Global's Benchmarking Your Hotline in 2016: What is your Data Telling You?

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